Skip to main content

tv   Mad Money  CNBC  January 22, 2014 11:00pm-12:01am EST

11:00 pm
my mission is simple. to make you money. i'm here to level the playing field for all investors. there's always a bull market somewhere, and i promise to try to help you find it. "mad money" starts now. hey, i'm cramer. welcome to "mad money." welcome to cramerica. other people want to make friends, i'm just trying to make you a little money. my job is not just to entertain you but to educate and teach you. call me at 1-800-743-cnbc. it is all happening right now in realtime. it's happening, unfolding at the speed of light! yeah. that's how this year feels so far, and it is shocking people.
11:01 pm
catching many of them unawares, including today. dow sank. nasdaq advanced .41%. just think of these amazing arcs we're having, arcs that are all unfolding as the news comes out. many of them at cross-currents with what was the conventional wisdom only a few weeks, days, or hours or maybe today minutes before. case in point, apple. we've had analyst after analyst judge this company based on the unknowable. how is china doing? is it good? is it bad? is it liked or is it hated? where she stops, nobody knows. it got to the point where how apple the company is really doing as a business meant nothing, versus the number of people in line at some chinese phone store. then suddenly, we get a lightning bolt tweet from old-time activist carl icahn.
11:02 pm
a huge apple shareholder, about how he is fed up with the company! >> sell, sell, sell -- sell, sell, sell. >> but he's not really selling. look at this. we feel apple board is doing great disservice to shareholders by not having markedly increased its buyback. of course, not this symbol, but that's okay. that's okay. when you own $3 billion worth, you don't have to get it right. he says he's bought more stock, the $500 million over the last two weeks, bringing his grand total on apple to almost $3 billion. immediately, it's the tweet that's shaking the moorings of the world's largest company. and the whole china debate means nothing. it's now all about icahn. then he goes on scott wapner's "halftime report" in one of the most memorable business television appearances since icahn's clash with bill ackman. he says that apple's disgraceful. disgraceful, his word, for not
11:03 pm
buying more stock given the share's incredibly cheaper and it's governing poorly. icahn charges that apple's an imperial board of directors and he wants that to change. icahn's also going to send a letter, throwing down the gauntlet about a company that he says is a no-brainer to buy. in a one-two punch, a tweet and a tv appearance, we're reminded that apple's a cheap stock and it's about to experience serious agitation in unlocking value. so much for the idea that apple now revolves around some china phone line. how about ebay? it seems incapable of delivering. stock many felt was becoming a risk-free short. sure enough, delivered an inline number and miserable guidance and i was ready to see it hammered once again. >> sell, sell, sell -- >> the house of pain. >> nope. here comes icahn again. this time with a proposal to join the board and split the company into the fast-growing paypal and the just okay marketplace businesses. instead of plummeting as i
11:04 pm
believe it would have on these earnings and the terrible guidance, the stock soared. a disappointing forecast -- >> boo! >> -- turns into sunny weather, no thanks to ebay, but thanks to the lightning strike of a lion who isn't anything but winter. or take netflix, this heavily shorted beast monster put up huge earnings and subscriber numbers after the close tonight. something you didn't expect by the miserable action of the stock. turns out the stock was wrong. and how fabulous would it have been if apple only took a tiny bit of the cash hoard and bought the company? that's what i want, growth, not more buybacks. or take ibm. oh, take ibm, here's a company that has warren buffett as its largest shareholder, a company with lofty goals that the oracle of omaha believes in. he's liked it because it's cheap
11:05 pm
and it has a massive buyback. buffett's an icon, ibm's an icon. last night we learned ibm's faltering and faltering badly. putting up earnings and sales numbers that were, i say, extremely disappointing. sure, the company might hit the long-term earnings per share targets, but it's getting there with buybacks, lower tax rates, gimmickry, but not revenues or cash flows. to me ibm has become the absolute opposite of what buffett normally likes. a company that's been outmoded by better mouse traps. i looked at a 1998 interview that buffett did with bill gates, of all people. and in it, buffett said i look for businesses in which i can predict what they're going to look like in 10 or 15 or 20 years. that means businesses that will look more or less so as they do today, except they'll be larger and doing more business internationally, end quote. with that in mind, buffett said he likes to focus on an absence
11:06 pm
of change, end quote. in 1998, that meant considering the internet and trying to figure out how an industry or company can be hurt or changed by it. and then i avoid it. he went on to say why he likes wrigley's and coke. here we are sixteen years later, buffett owns 6% of ibm, the company a victim of the trinity of disruptive technologies i write about in "get rich carefulry" which ibm seems helpless to combat. five-year plan of earnings growth. now according to the skeptical conference call, it seems they'll find it very difficult to meet those goals. you have to ask, what the heck is buffett doing in this stock in the first place? especially as ibm's revenues and cash flow, the ultimate mother's milk of earnings diminish before our very eyes. i question whether still great brand value in the ibm name, especially when it all seems to be done with low tax rates, and
11:07 pm
the only unequivocal positive i heard in that conference call, good pension investing. how about oil? another area where the market has turned on a dime. conventional wisdom had it that our oil was landlocked. our independent oil stocks have been market darlings for most of last year. our oil companies getting a price per barrel that's been at times $30 below the world price of brent. that's the brent index which all oil is configured off of. that's been a terrific boon to the refiners who are able to take our cheap oil, refine it and sell it at a price in sync with the brent crude. instantly all the stocks that have been hammered, every one of the oils, continental resources, eogs, they burst higher while the refiners had been so red hot. go ice cold, realtime, just like that.
11:08 pm
and that might be merely the beginning of this move. then there's natural gas. yeah, we know there's a huge glut of natural gas, longer term in the country, short-term, it's cold, and stocks that have languished of late because they're sitting on mounds and mounds of natural gas. linn energy and eqt suddenly take off like rabbits chased by dogs at the track. natural gas shot up so much that utilities can switch to coal to save money. that means norfolk southern, the railroad, and the heavy coal-based business get an extra spur from the already good quarter and rally that $4.23 today alone, a railroad. or consider the telco equipment makers,, juniper, ciena, juniper has an activist barking at it, ciena is now brimming with orders, f-5 is now fabulous and xilinx gave tepid guidance, quoted down 5%. next thing you know, as people
11:09 pm
realize verizon is spending like mad on equipment, xilinx goes from a dog to a darling -- >> house of pleasure. >> -- in less than 24 hours. and i don't think it's done going higher. how about dow chemical? "squawk box" had ceo on from davos, where i'm not right now. and i was listening to how he was doing. and frankly, it's falling on deaf ears because dow is behind ppg and dupont in accentuating the parts of the business while eliminating the negative commodities. mr. in between. next thing i know, we're hearing in realtime about my partner david faber right next to me, that dan loeb has taken a stake in dow. he's pushing for a breakup. a dead dow springs back to life as if by magic. last week, we were supposed to throw away our bonds because interest rates presumed higher. we've seen the interest rate sensitive stocks, the real estate investment trusts spring back to life as they haven't in months.
11:10 pm
here's the bottom line, not virtually overnight but actually overnight. not in slow motion, but in as it happens, not time lapse, but instant. that's the market since the new year began. and judging by the cross-currents, if you want to be successful you've got to be able to surf the rip tide. >> caller: boo-yah, jim cramer. >> not bad, partner, how about you? >> caller: i'm hanging in there. my question is on cliff natural resources. recently cliff dug below the 200-day moving average, but having problem making deliveries due to some heavy rains in brazil. is now a good time to get my feet back into cliff? >> vale has been a virtual house of pain for my charitable trust. i don't want you anywhere near that group right now. it's possible china comes back and we'll look back and say why didn't we buy cliffs, why didn't we buy vale? there are so many better stocks. i don't want you there. can i go to jay in virginia, please? >> caller: hey, jim, boo-yah. >> yo.
11:11 pm
>> caller: i bought some new skin enterprises stock last week and wanted to know, should i hold it or wait? >> that is, my friend, defined as a trade. you're on the other side of my friend buddy pal herb greenberg. i do not want to be in nu skin, when i see that decline based on something that happens in china, it reminds me of avon, which never came back. "mad money" will be right back. coming up -- no strings attached? from communication to transportation, chip maker xilinx is found inside devices big and small. weak revenues weren't enough to hold the stock down after a report today. so what got the street excited? don't miss cramer's exclusive. and later -- bottoms up? a privately held beverage giant just acquired the company behind jim beam and makers mark for a hefty premium. where should you turn for the next round? cramer's serving up the best wall street spirits, all coming
11:12 pm
up on "mad money." >> don't miss a second of "mad money." follow @jimcramer on twitter. have a question? tweet cramer #madtweets. send jim an e-mail to madmoney@cnbc.com or give us a call at 1-800-743-cnbc. miss something? head to madmoney.cnbc.com. [ male announcer ] there is no substitute for experience.
11:13 pm
for what reality teaches you firsthand. in the face of danger, and under the most demanding circumstances. experience builds character. experience builds confidence. and experience... has built this. introducing the 2014 glk. the engineering and the experience of mercedes-benz.
11:14 pm
see your authorized dealer for exceptional offers through mercedes-benz to get our adt security system. and one really big reason. our neighbor's house was broken into. and since we can't monitor everything 24/7, we got someone who could. adt. [ male announcer ] no one looks out for you like adt, with fast response monitoring to help protect you from burglary, fire, and more. starting at just over $1 a day. [ man ] and after buying two of everything, it was nice to only need one security system -- adt. [ male announcer ] get adt installed for just $49. adt. always there.
11:15 pm
what's my one inviolable rule for earnings season? you never ever, ever trade off the headlines. you wait until you've listened to the conference call and heard the full story, because if you jump the gun, i guarantee you, you'll be sorry. case in point, xilinx. the semiconductor company that makes special chips known as programmable logic devices that can be customized by the user as need. and the stock i have for my charitable trust. last night xilinx reported a 1-cent earnings beat off a 53-cent basis along with weaker than expected revenues. and the stock initially got slammed. fell from $47 and change down to $45 in after hours trading. the headline numbers are rarely what matters most, especially in
11:16 pm
tech, and the quick draw mcgraws who sold xilinx got their heads handed to them when they posted terrific results when it comes to the key metrics we really care about. for xilinx, that's the new generation of smaller 28 nanometer chips. they were up an astounding 79% year-over-year. that's huge. now, the program of the market that xilinx plays has always been a duopoly. beyond the strength in new chips, xilinx sold better than expected sales related to china's next generation 4g lte wireless build-up. it's no wonder xilinx soared back up to $48.62, as of today's close, up a buck from earnings yesterday. giving you a quick 9% gain from a month ago as a stocking stuffer going into the holiday season. let's check with moshe
11:17 pm
gavrielov, the president and ceo of xilinx to hear more about the quarter and where his company's headed. welcome back to "mad money." >> it's great to be back. thank you, jim. >> all right. i'm looking at piper jaffray, they say outlook disappoints. pacific crest, mixed. jpmorgan, mixed results. deutsche bank, choppiness persists. morgan stanley mixed. if it was so mixed, why did the stock have one of the biggest moves today? >> well, all of the numbers were really good and projections going forward were 2% to 6% growth. we're seeing a virtuous cycle in the early innings of the rollout. our market share has been growing rapidly. it will continue over 70% in the foreseeable future, and that is the growth driver. this gets compounded by the market demands of 4g, in particular now the rollout
11:18 pm
starting in china in earnest. that will continue for a few years. it's going to come in cycles might be a little lumpy. nonetheless in the product offering and the market demand, we think there's going to be big, potentially good news coming for us, and we projected up based on that. >> after the bell tonight, netflix reported an amazing number. that was impossible even just a few years ago. i think when you talk about this 28 nanometer tech shift, you have to tell us what we can do that we couldn't without this chip. >> what you can do is broadly transmit video over cell phones. this is the infrastructure you need to put in place to enable you to do that. as there's more and more cell phones out there, to be used more and more broadly to transmit video, you need these
11:19 pm
sorts of devices, 28 nanometer, in order to, which form the backbone of the internet and the wireless communication in order to transfer all of the information. if you don't have that, you have dropped calls, poor quality and dissatisfied customers who paid a lot for the cell phone. the more cell phones you sell, the more you're going to need the infrastructure. and our devices are what defined and designed exactly to meet those requirements. >> that's why china is so important. needs that infrastructure. you're forecasted to fall from 68% to 69%. i was surprised given the fact you're taking it to altera, why you can't raise your gross margins and not forecast a lower one. >> our gross margins have grown over the past six years from the low 60s to the high 60s. whenever we have huge growth in wireless, it tends to be a
11:20 pm
little lower on average than our corporate element. over the next few quarters, we expect other markets, in particular wire communications to start catching up and those tend to have high margins. this is a temporary blip. we don't think that any time soon it's going to go down in any significant way. 69 is outstanding, 68 is very good, and that's sort of the range we're in. >> one last thing, i've been watching the duopoly for many years. this is the most i've seen you pull away. what makes you so confident, i'm sure you'll be confident again in your february analyst meeting that you're going to be able to maintain that share? >> they're a great company and we're very focused on execution, and the proof is in the numbers. there was a lot of hand waving, who has greater market share, now the revenue is coming out
11:21 pm
and we hit 70%, and we've been there for several quarters now. i'm delighted with our results. we're resolute on continuing those good numbers. >> i can't wait for your february analyst meeting. thank you so much to the president and ceo of xilinx. good to see you, sir. >> thank you. >> xilinx, what can i say? it's going higher. stay with cramer. >> coming up -- take a shot? the bull market in booze has been giving investors a boost. need some liquid courage? don't move, cramer's pouring on the plays that could take the edge off.
11:22 pm
11:23 pm
11:24 pm
oh, hey, last week i told you all about how jim beam is being bought by the big privately held japanese liquor concern, for $16 billion. the stock was trading before the bid. i explained the beam deal is a textbook example of how companies can create value by breaking themselves up. a little more than two years ago, the old fortune brand spun off the home furnishing business to change the name to beam to focus on alcohol.
11:25 pm
it's a very happy ending for shareholders. one reason why i devoted a whole chapter to profiting from breakups in "get rich carefully." many others are really starting to move here. there's another take away from this deal, a more straightforward take away. to put it bluntly, the alcohol business is on fire. witness bud buying back oriental brewery for three times more than what they originally sold it for in 2009. the best place to be is the global spirits company! yes, that's where you want to be. global spirits! you see, while some beer companies are doing well within the fast-growing emerging market companies, beer is growing about even with those economies. but premium spirits, fancy hard liquor with strong brand recognition, those are viewed as an aspirational product in emerging markets. and these drinks are going at a
11:26 pm
much faster pace than beer. more like 15%. meanwhile, here in the united states, wine and liquor continue to steadily take market share from beer. let me put it another way. suntory was willing to pay a 25% premium for beam, jim beam as well as makers mark, courvoisier, sauza, a tequila brand and many other brands. this is the largest deal in the history of the spirits business. and more important, it's being done at a high price as suntory's paying 20 times earnings to buy beam. that means they must see real value in this spirits business. so if the global liquor business is red hot, how do we play it? other than by getting drunk as a skunk on my dirty linoleum floor -- or at my soon to be open mexican restaurant in brooklyn, which, of course, goes without saying. with beam out of the picture, because it's done, okay, that leaves three major players, diageo, brown-forman, and
11:27 pm
constellation brands. ever since constellation bought budweiser, as a condition of approving the anheuser-busch deal. now we're down to these two, the diag and brown-forman, who many of you know as jack. all right. yesterday, remy cointreau reported disappointing results. caused by the fact that china is clamping down on extravagant consumption, good luck, including no more alcohol at events hosted by government officials or army officers. this was certainly bad news for remy, but brown-forman barely does business in china and diageo gets 3% from people's republic. china may be a negative for diageo. a lot of people expected more growth and future from china, but really only a small one. probably does get mentioned in the conference call. the truth is, i like both companies here.
11:28 pm
which stock is a better buy, since i do like both? is it diageo which you might know as my friend johnny walker, j & b, captain of my team, captain morgan and a beer business that includes guinness where i have a pouring degree from when i visited dublin. brown and forman behind finlandia and corbel champagne among others. right here i think brown-forman is the superior stock. don't get me wrong, diageo has a fabulous long-term track record. but they have a problem. this company's become the king of the liquor industry in emerging markets. so good at one time, accounts for 42% of the company's sales last year, longer term i think it's vital to the growth story, but as for the near term, the emerging market economies have been pretty spotty of late. nigeria, brazil, and this makes some of the recent acquisitions seem, i think poorly timed. supports a 3% yield. stock trades at 19 times this
11:29 pm
year's earnings estimates. that's pretty expensive. at the moment, it's flirting with new highs. i like diageo a lot but the company reports next week and this stock almost always seems to go down on the announcement of the quarter. if we get a decent-sized pullback, i think it'll be a compelling buy. but for now, if you're looking for a play on liquor, i'm going to stick with brown-forman. see brown-forman is the smaller play, gets roughly half of the sales from jack daniels products and could be buyable on any pullback. and i'm tempted to tell you pull the trigger right here. i don't like to buy on top of a speculative move this stock made because traders can be taken out. brown-forman is most like beam, in fact, with beam being bought by a foreign company, brown-forman is the large american whiskey business still standing. the thing about brown-forman is
11:30 pm
jack daniels is accounting for half of the business, this company's all about whiskey and outperforming spirits in general. whiskey is still in the early innings of a brand new liquor cycle, and these can last for years. first, you get premiumization. that's a proliferation of high-end brands. then you move into the next stage, flavorization, we've seen this whole cycle play out with vodka. but only recently entered the flavor stage. i want you to think about jack daniels honey, which i thought was a woman drink, but i saw a lot of guys drinking it this weekend. with jim beam being taken private, brown-forman is the only way to play this raging bull market in whiskey. more focused on developed markets than diageo. as well as a 1% share internationally, i think those numbers are rising. brown-forman gets 45% of its sales for united states, 55% from overseas. australia, uk, mexico, germany, poland, france, russia and japan. a lot of upside in poland and russia where the preferred drink is still vodka. but whiskey's taking share and growing rapidly. for example, in 2000, whiskey
11:31 pm
made up just .6% of the polish spirits market. brown-forman is going increasingly international, but it's there already. it's better to go with the company with the best growth ahead rather than the already grown incumbent. however, the stock is not cheap. has a faster growth rate than diageo, growing off a smaller base, which means it could have a substantially larger runway to expand. the beam deal shines the light on the raging bull market in liquor. you've got two ways to play this, diageo, which my buddy, pal, friend johnny walker, often confused with paint thinner, and brown-forman. longer term, i like them both. but right now, i'd prefer jack. not that i want to brush my teeth with it. because it has more exposure to the turbo charged whiskey business and less exposure to the emerging markets. in both cases, you'd be better
11:32 pm
off waiting for a pullback. i just don't know if you're ever going to get one. can we go to john in pennsylvania, please, john? >> caller: boo-yah, mr. cramer. >> boo-yah, john. how are you? >> caller: i'm great. how are you? >> you know, got a good job. you know -- doing okay. >> caller: only got an inch of snow out here. i'm from pennsylvania. i have a question, i've been buying red robin on the pullback they've been having. it got down below 58, i got nervous. the last two days it's been coming up a little bit. but i love red robin, they've got the bottomless river floats going on. >> i was looking at brinker. i could not believe they put up numbers to surprise me. this red robin may have come down enough that i agree with you. i was talking to my friend, buddy pal stephanie link today, cnbc, and we both felt maybe these restaurants are overdone to the downside. i'm going with you, john, in pennsylvania. can we go to jeff in texas, please? >> hey, jim, how are you?
11:33 pm
thank you for my call. and this weekend, i just got "getting rich carefully" and looking forward to that. >> thank you. >> caller: mr. jim, i bought white wave before you had the president on there. and i think i had a nice three three-run homer when they took on earthbound. >> right. that was a good one for us. >> caller: and i know you're honest, i know you like diversification. but now what about stkl, sun up inc. because they have the organic snacks. >> i'm liking it. you read "get rich carefully," you know that one of my themes is this healthy, long-lived eating. people feel like if they eat the foods like white wave or your sunopta, they're going to live longer. thatst a prevailing theme that's still in its infancy. i think you've got horse sense! which, of course, is my highest compliment. let's go -- set them up, joe, over here. blame it on the alcohol.
11:34 pm
yes, sir, there's a bull market in booze. diageo and brown-forman are ways to play it. i say jack up with brown-forman, but please wait for a pullback before you take a swig. stay with cramer.
11:35 pm
11:36 pm
11:37 pm
it is time for the "lightning round" on cramer's "mad money." rapid-fire calls, i tell you whether to buy or sell. play until this sound and the "lightning round" is over. are you ready skedaddy? i want to start with tim in california. tim? >> caller: hey, cramer, let's follow up on bpfh, chart looks good to me. >> well, you know, that is the kind of bank that i really do
11:38 pm
like here, and i've got to tell you, i think that kind of bank is the kind that can go higher. >> buy, buy, buy! >> we're going to patrick in wisconsin. patrick? >> caller: boo-yah, jim, from wisconsin. i'm calling about a small oil drilling company who owns land in eastern texas. it's crk, comstock resources. >> well, you know, i think those independents -- the big ones have come down so much, whether it be pioneer or eog or continental. i'd rather have you go with a major. let's go to tamyhoennis in nevada. >> caller: hello, jim, how are ya? >> i'm fine, how are you? >> caller: i'm fine. and i'm in omaha, nebraska. >> well, we've got the oracle of omaha. >> caller: i want to find out what you think about c.a.t. caterpillar. >> yeah, my charitable trust sold it because we were concerned that we feel that we had too much china, has a lot of china exposure. so we've cut that back.
11:39 pm
i'm looking to buy the stock lower. let's go to jim in california. jim? >> caller: jim from laguna hills, california. with the airlines making so much money, they're buying new airplanes hand over fist. what do you think about the premier wi-fi provider for the airlines, gogo? >> i've got to be in full disclosure, gogo was on the previous show. so i have to go study what he said before i give an appropriate answer. can we go to chris in virginia? please, chris? >> caller: hey, jim, i want to know what you think about rgen. no longer receiving payments from bristol-myers squibb. >> oh, man. you know, i've got -- holy cow, replegen, i've not looked at replegen in several years. so many of these little biotechs. another homework one i've got to put myself to. let's go to alan in california.
11:40 pm
alan? >> caller: boo-yah, jim, how are you? >> i'm real good, alan, how about you? >> caller: wonderful. first of all, i love your book, 25 years of experience helping us out. thank you so much. >> my pleasure. took two years to write this one. what's up? >> caller: what do we do now? >> in which one? >> caller: tesla? >> tesla's a cult stock, solar city, tesla, netflix, amazon, they all work but they are cult stocks. let's go to sunny in arizona. >> caller: boo-yah from the city of 77 degrees! i've got slrn now up about 250%. tomorrow, they are coming out with a second offering of two million shares with 28 million outstanding. are those shares enough to really deflate the stock? >> sometimes i know something. i know that you know more about it than i do, and i cannot therefore opine on it, because i don't know whether the stock can handle that level of supply. i do know that i like the business that they're in, but
11:41 pm
i've got, again, better to own the fact i didn't know about the secondary. i just haven't been following it. let's go to ray in florida. ray? >> caller: god bless you, jim. >> thank you. >> caller: i'd like to know about linkedin. >> i think linkedin had a quarter that people didn't like, that i was comfortable with, because i like the subscription model, the advertising model. i am not deserting linkedin. i think it's a buy, not a sell. can i go to john in alabama? john? >> caller: boo-yah and war eagle to ya, jim. >> thank you. >> caller: i'm calling regarding apollo group, apol. >> well. >> caller: the stock has gapped up twice since october's $18 price. the company has cut costs and restructured. i understand you don't fight the take and price follows volume. what is your -- >> you know what, i mean -- like auburn, it's a winner. i don't like the others. i'm surprised this one does as well as it does. it's gotten all the money in that area. all the money's going toward that one. i'm not going against the money.
11:42 pm
and that, ladies and gentlemen, is the conclusion of the "lightning round." >> the "lightning round" is sponsored by td ameritrade. ♪ like, really big... then expanded? ♪ or their new product tanked? ♪ or not? what if they embrace new technology instead? ♪ imagine a company's future with the future of trading. company profile. a research tool on thinkorswim. from td ameritrade. i nethat's my geico digital wim. insurance id card - gots all my pertinents on it and such. works for me. turn to the camera. ah, actually i think my eyes might ha... next! digital insurance id cards. just a tap away on the geico app. could save you fifteen percent or more on car insurance. everybody knows that. well, did you know that when a tree falls in the forest and no one's around, it does make a sound?
11:43 pm
ohhh...ugh. geico. little help here. go! [ male announcer ] it's chaos out there. but the m-class sees in your blind spot... ♪ pulls you back into your lane... ♪ even brakes all by itself. it's almost like it couldn't crash... even if it tried. the 2014 m-class. see your authorized dealer for exceptional offers through mercedes-benz financial services.
11:44 pm
open to innovation. open to ambition. open to bold ideas. that's why new york has a new plan -- dozens of tax free zones all across the state. move here, expand here, or start a new business here and pay no taxes for ten years... we're new york. if there's something that creates more jobs, and grows more businesses... we're open to it. start a tax-free business at startup-ny.com.
11:45 pm
expectations. i'm always talking about expectations, because the expectations, meeting them, beating them, failing to reach them, determine the direction and outcome of stock prices during the earnings season. as i explain at the opening of "get rich carefully," knowing the expectations, it's often more important than knowing what the company's actually up to if you're going to try to predict if a stock will go up or down on the earnings, not to mention the magnitude of the move. consider the curious case of coach. we all knew the company was floundering going into the quarter, but someone forgot to tell the stock because it was well off the lows. so when the handbag retailer reported the quarter, the stock was crushed. >> the house of pain. >> the expectations were set low, but not low enough, so coach got hammered.
11:46 pm
then there's norfolk southern, a railroad synonymous with coal. so when rival csx, a big coal railroad, reported numbers last week and disappointed because of coal, norfolk southern got crushed right along with the rail compadre. when norfolk southern reported this morning, the business away from coal was so strong and coal itself wasn't so weak that the stock blasted higher, taking out its high from before when csx reported and then some. that's because the faltering csx set the expectation level so low that norfolk had no problem beating the newly diminished forecasts. intel, on the other hand, is still smarting, not from a truly disappointing quarter but from multiple upgrades that set the bar ridiculously high. there was no way intel could meet these expectations, it's been on a one-way trip down ever since, even though my charitable trust is trying to build a big position in the company in shares. gamestop, their earnings reports didn't meet the high standards set by multiple upgrades going right into the quarter. then there's united technologies. a little more than a month ago, did what i call a soft preannouncement, a shaving down
11:47 pm
of expectations because of the federal government's cutbacks in military spending. the negativity was met with a torrent of downgrades. fast forward to this morning, though, when we saw the actual earnings and orders, and united technologies, they crushed it, reporting sharply better than expected numbers. >> buy, buy, buy! >> the stock took off like a rocket and it's got much further to run. the quarter was so powerful that it took boeing, one of my favorite companies, up huge. now the question has become is the $2.70 run in boeing too huge? does the stock now reflect unrealistic expectations? we'll find out in a week's time, but i sure wish it were up less going into the quarter. i have total faith in jim mcnerney. and i'll be talking about it on "power lunch" all the rest of the week. finally, there's the banks, literally all the banks. we came into the year with the prevailing wisdom that banks couldn't make that much more money off their burgeoning deposits than they did last year, and they would all be hurt by terrible mortgage numbers thanks to the spike in interest rates for last summer. the naysayers couldn't have been more wrong.
11:48 pm
we've seen some terrific margins, the amount the banks make off your deposits and that's been controlling, not the tepid mortgage markets, hence why the stocks are so strong. if the stock has fallen hard, harder than the business and the company does slightly better than expected, you're going to get very big gains. but if the stock surged ahead of the quarter, things better be perfect or the gains evaporate in a heartbeat. stay with cramer. >> i'm jim cramer, and welcome to my world. >> one man, one mission -- >> i just want to make you money. >> eight years. >> you need to get in the game. >> tens of thousands of miles traveled. >> this new black gold rush is just getting started. it's the sound of american industry roaring back to life. >> hundreds of ceos. >> my life story can be your life story. >> thousands of callers. >> boo-yah, jimbo! >> millions of your e-mails and tweets. "mad money" thanks cramerica for
11:49 pm
being with us for over 2,000 episodes.
11:50 pm
11:51 pm
listen, guys. i know the snowstorm hit a lot of people pretty hard yesterday and these freezing temps aren't going anywhere. it's times like these you just want to curl up and binge watch "orange is the new black." no, i'm challenging you to do something slightly more
11:52 pm
productive on your snow day, like taking charge of your financial future. so tweet me @jimcramer, #getaplan with your most pressing 401(k) questions, and be sure to tune in tomorrow to catch cramer's playbook. now, let's get to this week's installment of "am i diversified." you call or tweet me. you tell me your top five holdings and ill tell you whether it's diversified enough. let's start with a tweet tonight from pvathis. who tweets, jim, love your show. royal bank of canada, mcdonalds, mcd, am i diversified? all right. we got an energy company, we've got canadian, canadian bank, we've got a soda company, we have a tobacco company and we have a food company, a restaurant company. no. that's too concentrated. i am going to rip out coca-cola and put in bristol-myers. get a little diversity.
11:53 pm
i see too much food and beverage. let's go nate in ohio. nate? >> caller: b-b-big boo-yah, mr. jim cramer. calling from sunny dayton, ohio. >> all right. rub it in, what's up? >> caller: i've got five stocks for you. hoping you can tell me if i'm diversified. international game technology, igt. wisdom tree, wetf, us ecology, pcp and estee lauder, e.l. >> wow, what an interesting and, indeed, eclectic combination of u.s. ecology, which is a waste disposal company, and estee lauder. wisdom tree, etf company. we know the fragrance company, i like that business, igt, that's gaming, position cast parts, wow, look at u techs, boeing, us ecology waste, perfume, etf, airplane, gaming, bingo! all right, let's go to albert who is in florida. albert?
11:54 pm
>> hey, jim, old friend, thank you. i just want to thank you for all you've done for me. >> thank you. >> caller: you've really helped me a lot over the years. just reading your books and -- um, my daughters just became members of your actionsalertsplus.com. i've got them competing with me on earnings here. i'm a cancer fighter. >> okay. and i wish you best of luck. >> caller: i want them to take over this, because i don't want to turn it over to a broker. >> i hear you. >> caller: we're doing too good. the first two stocks i'm playing with the house's money. that's google and gilead. my other ones are jpmorgan, honeywell and disney. >> all right. first, i want you to win that fight against cancer. i want you to win. all right. let's go.
11:55 pm
gilead, one of my four horsemen of big pharma. that stock, since i wrote about it in the book, it's done pretty incredible. david kote runs honeywell. we think the world of them. jp morgan bank. google, large position in my charitable trust and disney, bob iger, one of my bankable 21, bank, diversified industrial and biotech, bingo. by the way, gilead, i don't think i've ever seen anything like that stock. that's just levitating. let's go to jason in massachusetts. jason? >> caller: hey, jim, i have nxp semiconductors. >> oh, okay. >> caller: biomarin. american rail cars and international game technology. >> wow. these are very thoughtful portfolios. extremely thoughtful portfolios today, and definitely diversified. okay. here we go. we've got american rail car
11:56 pm
along with trinity. that's been on fire, why? because we know there's been a lot of rail accidents and you may have to have all new container trains. igt, the gaming company. biomarin, one of my favorite biotechs. smaller than the four horsemen. seadrill, oil service and nxp is a very good little semiconductor company. we have a semi company and i like those right now. rail car, gaming, drug and oil. i don't know, that seems pretty darn good to me. stay with cramer. >> when money talks, it comes to cramer first. >> why are you so bullish on our country? >> we just see the huge recovery potential in the united states. >> we are in control of our destiny in this country and i think we need to get after it. >> in our industry, you're either riding that curve or you're not. >> my message is, don't bet against us, we're going to be the winner in this industry. >> watch "mad money" and be the first to know.
11:57 pm
11:58 pm
11:59 pm
a lot of people have been saying maybe personal computers are bottoming. sure enough, it's so hard in this market. i talked about a rip tide. after the close, western digital, a chief hard drive company comes out and surprises everybody with some downbeat numbers.
12:00 am
so tomorrow is a new day, unless you're short netflix, and then, frankly, there's no tomorrow because that stock is up so huge. and i keep telling you, the market cap doesn't represent the opportunity. it's bigger. i'd like to say there's always e market. i'm jim cramer. i will see you tomorrow! in this episode of "secret lives of the super rich" -- >> it's the richest two days in sports, with $27 million up for grabs. >> i'm a 21-year-old student. >> justin manages $60 million worth of thoroughbreds out of his dorm room at nyu. >> for privacy and security reasons, we can't tell you who the owner is but we can tell you it was once home to the composer leonard bernstein, as well as diane keaton and more recently christine ricci. and there's even a little hollywood scandal connected to is

92 Views

info Stream Only

Uploaded by TV Archive on